Today’s Trading Plan: A Chance For The Bulls To Do Something

Technical Outlook:

• Monster rally yesterday on extremely low volume which puts a lot of skepticism on its legitimacy. 
• Second biggest rally seen since the whole sell-off began. 
• SPX has to push above 1993 to break the current trading pattern of this market which has been a series of higher-lows and lower-highs over the past two weeks. 
• Ultimately I believe this market finds its way lower in the days and weeks that follows, but I have to respect the current daily price action along the way. 
• Despite the huge rally, VIX only dropped 10.4% down to 24.9. 
• T2108 (% of stocks trading above their 40-day moving average) soared yesterday moving 44% higher to 21%. 
• Potential double bottom confirmation on SPX 30-min chart at 1975. 
• It is the gaps that are really standing in the way of swing-traders right now. When you have an equal number of monster gap up/down from a day-to-day basis, the penalty for being on the wrong side of the trade is greatly intensified and creates a high-risk environment that is not conducive for overnight holds. 
• The large gaps in the market, the record number of stock buybacks, and ETFs that are constantly accumulating/dumping large chunks of stocks, and most importantly the high frequency trading, shows just how illiquid this market has become in recent years. These entities are the most responsible for the massive market swings that stocks incur each day. 
• This market is one that seeks to fill traders with regret, whether it be for selling too early, selling to late, not being long enough, not being short enough. That kind of regret will manipulate you into trading in a manner that will bring ruin upon the capital in your portfolio. 
• You cannot, with any confidence, consistently pick the direction of this market day-to-day. 
• Trade nimble, be careful about holding positions overnight, because the volatility is still at extreme levels and much of the daily moves are happening before the market ever opens. 

My Trades:

• Did not close out any swing positions on Friday. 
• Did not add any new swing positions on Friday. 
• 100% Cash
• Yesterday’s rally and today’s pre-market strength does not sit well with me at all… these moves are coming off of volume levels that are almost non-existent. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: